The antitrust lawsuit filed by Cablevision against Viacom in February of 2013 will move forward after a federal judge rejected Viacom’s efforts for dismissal on Friday. If the court rules in favor of Cablevision, it would set a precedent restricting the ability of programmers to force multichannel video program distributors (MVPDs) to accept bundles of ancillary content in order to gain access premium channels.
Cablevision filed the suit against Viacom after they were forced to carry and pay for 14 low-rated or obscure “suite networks” that Cablevision says its customer do not want. For example, Cablevision must carry channels such as Palladia, MTV Hits, and VH1 Classic, in order for them to gain access to must-have networks like BET, Comedy Central, MTV and Nickelodeon. The alternative would have been for Cablevision to pay a penalty of roughly $1 billion.
Cablevision believes that Viacom used a “per se” illegal channel tying arrangement which violates federal antitrust laws. The lawsuit also accuses Viacom of engaging in unlawful “block booking,” a practice that got Paramount Pictures in trouble during the Golden Age of Cinema.
In contrast, Viacom said that bundling was a valid and longstanding industry practice. They also noted that Cablevision’s contract did not permit an “a la carte” approach to selecting channels.
Cablevision released a statement saying that it was “gratified” by the decision handed down by United States District Judge Laura Taylor Swain. “We continue to believe that Viacom’s tying of its popular networks to carriage of its lesser-watched ancillary networks is illegal, anti-consumer and wrong,” Cablevision said. “We look forward to further pressing our case at the next stage of the proceeding